Finance ministers from the G7 and other major economies met in Washington on Monday to discuss ways to reduce dependence on rare earths from China, including setting a price floor and new partnerships to build up alternative supplies, ministers said.
The meeting, convened by US treasury secretary Scott Bessent, included finance ministers from G7 members Japan, Britain, France, Germany, Italy, Canada and the US and officials from Australia, Mexico, South Korea and India.
US trade representative Jamieson Greer and representatives from the US Export-Import Bank and JP Morgan also attended, but no joint statement was issued by the meeting’s participants.
The treasury said Bessent sought “to discuss solutions to secure and diversify supply chains for critical minerals, especially rare earth elements”, and expressed optimism countries would pursue “prudent de-risking over decoupling” from China.
A US official said on Sunday Bessent was going to urge participants to step up efforts to reduce reliance on critical minerals from China, which has imposed strict export controls on rare earths, most recently on supplies to Japan.
Japanese finance minister Satsuki Katayama told reporters on Monday night there was “broad agreement on the need to swiftly reduce reliance on China for rare earths”. She said she outlined short-, medium- and long-term policy approaches for G7 and like-minded countries to bolster non-Chinese rare earth supplies.
What is very important to me is that we in Europe do not sit back. Neither complaining nor self-pity helps us, we have to become active
— Lars Klingbeil, German finance minister
“These include creating markets based on standards such as respect for labour conditions and human rights and deploying a range of policy tools — support from public financial institutions, tax and financial incentives, trade and tariff measures, quarantine measures and minimum price setting,” Katayama said. “I stressed the importance of committing to the measures.”
A spokesperson for China’s embassy in Washington could not be immediately reached for comment.
The gathering’s participating countries and the EU account for 60% of global demand for critical minerals. However, China dominates the supply chain, refining between 47% and 87% of copper, lithium, cobalt, graphite and rare earths, according to the International Energy Agency.
The minerals are essential for defence technologies, semiconductors, renewable energy components, batteries and refining processes.
Last week China banned exports of items destined for Japan’s military that have civilian and military uses, including some critical minerals.
German finance minister Lars Klingbeil said discussions at the meeting included a potential rare earths price floor and partnerships to boost supplies, but noted the talks had only begun with many unresolved issues.
He said rare earths and critical mineral supplies would be a central topic under the French presidency of the Group of Seven advanced economies this year. However, he warned against an anti-China coalition, stressing Europe needs to move faster on its own to develop supplies of important raw materials.
“What is very important to me is that we in Europe do not sit back,” Klingbeil said. “Neither complaining nor self-pity helps us, we have to become active.”
He said the EU needed more financing at the bloc level, pointing to a new German raw materials fund. The EU must also move forward urgently on recycling, Klingbeil said, citing its “big potential” for reducing dependencies and broadening supply.
South Korean finance minister Koo Yun-cheol told the meeting global value chains should be strengthened based on comparative advantage, emphasising the importance of recycling critical minerals for resilient supply chains, according to a statement from his ministry.
Koo also urged countries to pursue corporate projects-oriented cooperation, while Canada and Australia asked South Korea for technology collaboration, the ministry added.
Reuters
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